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Gillian Tamia
on Dec 12, 2024

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Which of the following is often referred to as the basic postulate of economics?

A) Individuals act only out of selfish motives.
B) Incentives matter--individuals respond in predictable ways to changes in personal costs and benefits.
C) The accuracy of the assumptions is the best test of an economic theory.
D) The value of a good is objective; it is equal to the cost of producing the good.

Basic Postulate

An underlying assumption or principle that serves as a foundation for a theory, system, or statement.

Incentives

Rewards or penalties that motivate individuals or entities to act in certain ways, often used in economic policies, business strategies, and workplace productivity measures.

Economic Theory

A set of principles and methodologies that explain how economies operate, exploring the production, distribution, and consumption of goods and services.

  • Understand the fundamental principle of economics regarding the importance of incentives.
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Nnamdi LynchDec 12, 2024
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